United
States District Judge Ellen S. Huvelle referred this case to
the undersigned for a determination of Defendant CA's
Motion to Compel (" Motion" ) [81]. ( See
Judge Huvelle's Oct. 8, 2015 Order). Defendant CA moves
this Court to compel the Plaintiff United States of America
to produce documents relating to 1) the claims for which the
United States intends to seek damages under the False Claims
Act (Requests for Production 15, 26, and 27), and 2) the
General Services Administration's (" GSA" )
proposed rule to eliminate a government contract clause known

Page 2

as the " Price Reduction Clause" (Requests for
Production 16, and 18-22). ( See Def.'s Mot. at
1.) Plaintiff United States filed an Opposition [82] and
Defendant CA filed a Reply [88]. On December 9, 2015, the
undersigned held a Hearing on Defendant's Motion. (Dec.
9, 2015 Min. Entry). Upon consideration of the motions and
supporting documents, the testimony at the hearing, and for
the reasons set forth below, Defendant's Motion is
granted in part and denied in part.

BACKGROUND:

A.
Plaintiffs' Underlying False Claims Act
Complaints

The
underlying case stems from complaints filed by Plaintiffs
alleging that Defendant CA defrauded GSA and other federal
agencies by failing to disclose to GSA discounts on their
products that they gave to other consumers. (Sec. Am. Compl.
(" SAC" ) [44]; Intervenor's Am. Compl. ("
IAC" ) [55].) CA is one of the leading manufactures of
software for computers, primarily selling software licenses
and maintenance packages. (SAC ¶ 17.) Because the
Government is such a large and powerful purchaser of goods
and services, GSA takes advantage of the bargaining position
and contracts on behalf of the entire Government through a
contracting mechanism known as a " Multiple Award
Schedule" (" MAS" )

Page 3

contract. ( Id. ¶ 11.) This way, each
individual Government office does not have to enter into
separate price negotiations and has much more leverage than
if it were acting alone. ( Id. ) Accordingly, when a
Government agency wishes to purchase an item that was part of
a MAS contract, the agency can purchase the item from the
vendor at the price that was previously negotiated between
the vendor and GSA (or, depending on the size of the
contract, the agency may negotiate for even deeper discounts
than provided by the MAS contract). ( Id. )

To
negotiate a MAS contract, vendors are required to provide GSA
with a catalog (called a " Consumer Sales
Practices" form) that lists the lowest prices they have
sold their items to other consumers. See 48 C.F.R.
§ 515.408; (IAC ¶ 26.) GSA and the vendor then
negotiate and typically agree to the best price that has been
offered to the vendor's other customers. See
General Services Acquisition Manual (" GSAM" )
§ 538.70(c); (IAC ¶ 29). If the vendor does not
offer its best price, then it is supposed to provide an
explanation so that GSA can determine if the offered price is
" fair and reasonable, even though comparable discounts
were not negotiated," and if the contract is still in
the

Page 4

" best interest of the Government." GSAM §
538.270(d); ( see also I.A.C. ¶ 29).

After
the MAS contract is awarded, the vendor is required to
maintain the negotiated price and discount relationship. GSAM
§ 538.272(a); ( see also I.A.C. ¶ 31). The
MAS contract typically includes a " Price Reduction
Clause" (" PRC" ) which requires vendors to
consistently monitor their pricing over the lifespan of the
contract and provide the Government with the same price
reductions that they give to other comparably situated
consumers (sometimes referred to as the PRC's "
tracking customer requirement" ). GSAM §
538.272(a); ( see also I.A.C. ¶ 31).

On
September 26, 2002, CA entered into a MAS contract with GSA,
Contract Number GS-35F-08232M. (IAC ¶ 37.) As required,
CA submitted a Consumer Sales Practices (" CSP" )
form listing its lowest prices, and the contract included a
PRC which guaranteed that the Government would receive the
" best price" to purchase CA's products. (IAC
¶ 47.) The contract originally spanned from 2002 to
2007. (IAC ¶ 41.) The contract was extended from 2007 to
2008. ( Id. ) The contract was extended for another
one-year term, from 2008-2009. ( Id. ) The contract
was extended for an additional three-year term, from
2009-2012. Finally, the contract was extended again from 2012

Page 5

to March 2014 (the date the United States filed its Complaint
in Intervention). ( Id. ) Under the contract and its
extensions, various agencies, offices, and entities have
purchased hundreds of millions of dollars of items through
blanket purchase agreements (" BPA" ), which allow
them to adopt the terms and prices from the GSA MAS contract.
(SAC ¶ 27.)

On
August 24, 2009, an employee of CA, Dani Shemesh ("
Relator" ), filed a complaint against CA alleging that
it had violated the False Claims Act in its dealings with the
Government. (Compl. [1]; see also SAC ¶ ¶
61-66.)[1] In particular, Relator alleges that in
the process of negotiating the GSA MAS contract, CA lied to
the Government about giving it its best price, because CA had
actually given other consumers much lower prices and never
disclosed this information to the Government. ( See
SAC ¶ 51.) As a result, the claims submitted by CA
pursuant to the MAS contract, or pursuant to the BPAs formed
on the basis of the MAS contract, were false. ( See
id. ) Further, Relator alleges that CA's failure to
disclose this information pursuant to the PRC resulted in
additional false statements made throughout the contract. (
See id. )

Page 6

On
August 19, 2010, GSA's Office of Inspector General
(" OIG" ) issued a subpoena to CA. (GSA OIG
Subpoena [81-5] at 2.) The subpoena sought information to
help the United States determine whether any transactions
were fraudulent and whether it would intervene in
Relator's case. (Pl.'s Opp. at 3.) CA responded to
the subpoena by producing its sales database. (Def.'s
Reply at 4.) During its investigation from 2010 to 2014, GSA
OIG identified eleven of CA's transactions as being of
" significant concern." (Dec. 9, 2015 Mot.
Hr'g.)

On
March 24, 2014, the United States filed a Complaint in
Intervention. (Intervenor's Compl. [42]; see
also Intervenor's Am. Compl. (" IAC" ))
[55].)[2] In the Complaint, the United States
provides a series of 18 examples of allegedly fraudulent
transactions whereby CA purported to give the Government the
best price and failed to disclose that it actually had given
other consumers more favorable discounts; however, the United
States did not include the eleven transactions that it
identified as being of " significant

Page 7

concern" in its Complaint. (IAC ¶ ¶ 75, 80,
111.) The United States alleges in part that Defendant
violated three provisions of the False Claims Act: In Count
I, the United States alleges " Defendant knowingly
presented, or caused to be presented, for payment or
approval, false and/or fraudulent claims . . . to the United
States, which the United States paid" in violation of 31
U.S.C. § 3729(a)(1) (2006) and 31 U.S.C. §
3729(a)(1)(A) (West 2010). (IAC ¶ 127.) In Count II, the
United States alleges " Defendant knowingly made, used,
or caused to be made or used, false records or statements
material to a false or fraudulent claim . . . to get the
United States to pay or approve false or fraudulent
claims" in violation of 31 U.S.C. § 3729(a)(1)(B)
(2009). (IAC ¶ 131.) In Count III, the United States
alleges " Defendant knowingly made, used, or caused to
be made or used, a false record or statement material to an
obligation to pay or transmit money or property to the
Government, or knowingly concealed or knowingly and
improperly avoided or decreased an obligation to pay or
transmit money or property to the Government" in
violation of 31 U.S.C. § 3729(a)(7) (2006) and 31 U.S.C.
§ 3729(a)(1)(G) (West 2010). (IAC ¶ 136.)
Plaintiffs contend that all these fraudulent transactions
taken together have resulted

Page 8

in the Government overpaying at least $100 million. (
See SAC ¶ ¶ 63, 66.)

B.
Discovery

On
April 22, 2015, Judge Huvelle ordered that fact discovery be
completed by February 22, 2016, and the remaining discovery
(expert discovery) by April 22, 2016. (Scheduling Order
[76]).

In June
and July of 2015, CA served the United States its first and
second requests for production of documents, totaling 37
requests. (First Req. [81-7]; Sec. Req. [81-8].) Requests
1-14 sought documents related to the 18 examples that the
Government listed as allegedly fraudulent in its Amended
Complaint. (First Req. at 7-14.) Request 17 sought documents
relating to the impact and effect of the PRC in MAS
contracts. ( Id. at 20; Def.'s Reply at 16.)

The
Government has produced nearly 7,000 pages of documents in
response to the 37 requests and claims to be continuing to
produce documents. (Pl.'s Opp. at 4.) The Government,
however, refuses to produce documents for Requests 15, 16,
18-22, 26, and 27. (Pl.'s Opp. at 1.) The parties
conferred multiple times to attempt

Page 9

to resolve the discovery disputes but have been unsuccessful
in reaching a resolution. ( See Jonathan Su Aff.
[81-2] at 3-4.)

On
October 7, 2015, Defendant CA filed a motion to compel the
Plaintiff United States to produce documents relating to 1)
the claims for which the United States intends to seek
damages under the FCA (Requests for Production 15, 26, and
27), and 2) the GSA's proposed rule to eliminate the PRC
from MAS contracts (Requests for Production 16 and 18-22).

1.
Requests 15, 26, and 27

Requests
15, 26, and 27, seek documents relating to transactions that
the Government intends to claim were fraudulent and
accordingly seek damages:

Request 15 seeks all documents or communications relating to
the eleven transactions between the Government and CA that
the Government had identified as being of " significant
concern" in its prior investigation (but did not list as
examples of fraudulent transactions in its Complaint).

Request 26 seeks all documents or communications relating to
any transaction for which the Government alleges it was
overcharged and intends to claim damages.

Request 27 seeks all documents or communications relating to
any guidance, memoranda, and policies for placing

The
Government objects to producing these documents on the basis
that it cannot provide this information until CA first
produces an intelligible database listing its sales.
(Pl.'s Opp. at 2.) The Government claims CA's sales
data is a necessary predicate to identifying the relevant
transactions for which the Government will seek damages
because CA's sales data will show whether CA gave more
favorable discounts to other consumers than the Government
and whether it failed to disclose such information. (
Id. ) If CA failed to disclose such information, the
Government will identify the transactions as fraudulent and
likely seek damages. ( Id. ; see also
Pl.'s Initial Disclosures [82-2] at 9.) While the
Government does not dispute the potential relevance of these
requests, it argues that it should be permitted to provide
responses after CA has provided more information. (Pl.'s
Opp. at 11.)

CA
claims that the Government's statements about it needing

Page 11

an intelligible sales database are a red herring because it
has already provided the database to the Government.
(Def.'s Mem. [81-1] at 2.) CA argues that the Government
is impeding its ability to conduct proper discovery because
CA does not know what transactions are at issue and does not
have the documents that would allow it to depose the
witnesses who identified transactions as fraudulent.
(Def.'s Reply [88] at 7.) CA mentions that if the
Government truly has a need for ...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.